Even if one of your members is a professional accountant or bookkeeper for nonprofits, it will still be an investment to hire a specialist to handle your church's books. This is why we encourage you to make it a priority. Your church can reap the benefits of this investment in three ways.
While mistakes in church bookkeeping are not uncommon, there are steps that you can take to avoid them.
Outsourcing is a good option. A bookkeeper outsourced can be a great option for smaller churches to medium-sized ones. It will increase the expertise and accuracy of your bookkeeper, as well as lower costs. Let's take a closer look at each of these:
You will be able to reassure your congregants their tithes and donations are being used as intended. When congregants know their donations are used wisely, they are more likely to continue to donate.
Problem is, the Pastor and the volunteers may not know how to properly set up an accounting system. As a result, your church may have ineffective bookkeeping.
Also, you need to be capable of looking at the bank balance to see at a glance what percentage is designated funds or restricted funds. You will also need to know how much money is remaining to keep the lights on.
You are the best time to hire our church bookkeeping service to make sure your financial records and policies are correct. It is also a great idea to have your bookkeeping done by someone else, so that you can concentrate on building your business and never fall behind.
Diocesan Canons state that treasurers and other officers of a church parish, mission or other institution be “bonded” according to Episcopal Church Canons. Episcopal Church Canons require that treasurers be “adequately bonded.”
seven years
Financial Records are traditionally kept for seven years. This relates to the laws of tax audits and the number of years back the IRS is allowed to look when determining an organization's tax liability.
The IRS may begin a church tax inquiry only if an appropriate high-level Treasury official reasonably believes, based on a written statement of the facts and circumstances, that the organization: (a) may not qualify for the exemption; or (b) may not be paying tax on unrelated business or other taxable activity.